Admitting that the government has failed to make full use of the suspicious transaction reports (STRs) provided by various financial institutions, the central board of direct taxes (CBDT) has asked its field officers to suggest how to make the measure more efficient and productive.

“STRs constitute a strategically important source of information for income tax department. In the last few years the number of STRs has grown tremendously and is growing further. The department has not been able to investigate all STRs promptly,” the CBDT said in an office memorandum to its field officers.

While acknowledging the need for faster investigation of STRs, CBDT said it is important to know which STRs have not been very useful so that they could be discontinued by the financial intelligence unit-India (FIU-IND). The unit is responsible for collating and analysing information from various financial institutions to compile a database of suspicious transactions.

“This would facilitate reduction in number of STRs and enable quicker and better investigation in remaining STRs,” the department said.

Financial institutions have to report any transaction which they deem to be suspicious, irrespective of whether there is any cash involved. This could involve false documents, or any transactions that are proceeds of crime, unusual account activity and high value transactions.

The board has asked its officers for feedback on which STRs were not useful, how to improve the quality of STRs, and what kind of information should the STRs need in order to help the tax department crack new ways of tax evasion.